Attacks Impact Employee Confidence

November 15, 2001 (PLANSPONSOR.com) - US workers'
confidence in their financial well-being is slipping in the
wake of September's terrorist attacks, according to The
Principal Financial Well-Being Index.

The Index, a survey of more than 1,500 employees of US
companies, also highlights the resolve, patience and
optimism of US workers.

When asked how the terrorist attacks and market downturn
have affected their retirement planning:

some 45% of the sample have reviewed or plan to
review their strategies in direct response to the
events,

of the 28% who had already reviewed their strategies,
27% are saving more than they were prior to the
attacks,

however, 70% did not change the amount they were
saving, and

only 3% are saving less

Asset Allocation

In terms of their asset mix, only 21% of those surveyed
that have retirement savings have moved their assets from
volatile to more stable investments – in response to the
terrorist attacks, in comparison to the 28% who moved from
equities to bonds in the previous quarter.

According to The Index, US workers have also changed
their retirement expectations with:

only 3% now planning to retire before age 55, down
from 9% a year ago, and

over 15% now planning to retire between ages 55-59,
verses only 8% a year ago,

a little over 41% plan to retire between ages 65-69,
which has remained fairly static over time.

In addition, according to The Index, more people are
planning for retirement than in the past. This quarter,
only 29% of respondents said they had not yet planned for
retirement, down from 34% the previous quarter.

Benefits

On employee benefits, the index shows that 45% of
employees want improvements in their healthcare plan, up
significantly from 37% in the previous quarter, while 16%
wished for defined contribution plan improvements, down
from 18%.

On a scale of one to 10, with 10 being most important,
employee desire for stock options fell this quarter from a
rating of 5.2 to 4.2. In addition, only 3% want their
company to add stock options as a benefit.

Health insurance remains the most common benefit that
growing companies offer their employees, offered by 86% of
employers. Defined contribution retirement plans and life
insurance tied for second with 67%.

Satisfaction

Employees continue to be most satisfied with their
defined benefit retirement plans, with an average rating of
7.3 on a scale of 1 to 10, while defined contribution plans
received an average rating of 6.8.

The index also revealed that workers are again placing
more emphasis on job security. In terms of importance, some
46% of respondents ranked job security first, while
two-fifths ranked long-term financial future at the top. In
comparison, in the previous quarter, job security and
long-term financial future ranked equal in importance by
44% of respondents.